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Right Time to File Bankruptcy?

When Is the Right Time to File Bankruptcy?

When is the right time to file bankruptcy?

Timing can mean everything in life. Bankruptcy is no exception. When is the right time to file bankruptcy?  A few basic tips about the right time to file bankruptcy can be very helpful.

1. File Before Collection Becomes Too Aggressive

If you were considering Chapter 7 or Chapter 13 bankruptcy, it is better to file your case early. If you wait too long, aggressive collection may follow. If you’re considering chapter 7, a garnishment can make it much more difficult.  The garnishment will take a substantial portion of your paycheck, taking away finds you could otherwise use to pay for your bankruptcy fees.

2.  File After You Have Received and Spent Your Tax Refund

In Indiana, it may be wise to file bankruptcy after you have received and spend your tax refund. In Indiana, only a very low exemption is allotted to protect your tax refund. Therefore, if you were owed a tax refund in the upcoming weeks or months, you may lose a portion or all of that tax refund during the bankruptcy.

3.  File As Soon As You Discover Bankruptcy Is Right For You

Many people put off bankruptcy for years.   If you have determined with an attorney that you need to file for bankruptcy, file your case as soon as possible. If you are carrying a heavy debt load, talk to an attorney right away. People wait for years to file bankruptcy much to their disadvantage.  After you file for bankruptcy, you can get a fresh start to move on with your life.

4.  Always Follow the Advice of Your Attorney

Ultimately, the greatest guidance as to the right time to file for bankruptcy will come from your attorney. A consultation with a bankruptcy attorney is many times free. If you follow the advice of a bankruptcy attorney as to the right time for bankruptcy, you can avoid costly mistakes and unnecessary stress.

Debts of the Deceased

What Happens to Someone’s Debts When They Pass Away?

What happens to the debts of someone who has passed away?

When a loved one passes away, it can be difficult for the entire family. The situation can be also become confusing when the notices for the deceased family member’s debts keep coming in the mail. The creditors are demanding payment, but your loved one is now deceased. Do you need to now pay these bills? It is important to understand what happens to someone’s debts when they pass away.

Many Creditors Will Simply Write Off the Debt if Presented a Death Certificate

When a person passes away, many times their debts pass away with them. This is because many creditors will simply write off the decedent’s debts if they are presented with a death certificate. Although many creditors are not required by law to write off the debt, credit card companies and even many medical providers offer to either write off the debt entirely or drastically reduce the size of the debt.

If you were a cosigned with your recently deceased family member, you will still be responsible to repay the entire debt yourself. The creditor will not very likely write off the debt if only one signer on the debt passes. In addition, do not continue to use the credit cards of deceased person. If the credit provider finds out you used the card personally after the death, they may take legal steps to make you responsible to pay back that portion.

Some Creditors will Seek to Be Paid Out of the Estate if One is Opened

When someone passes away, the property that they own will be placed into an “estate” if the property exceeds a certain set value. This estate is usually opened in the county court where the deceased person resided. It is assigned a court case number. An administrator of the estate is named and certain required legal documents must be filed before estate can be full administered.

If someone passes away and an estate is required to be opened, the creditors may seek to be paid from the proceeds of the deceased person’s estate. This can drastically reduce the proceeds available to other family members from the estate. Although some creditors may elect to write off the debts beforehand, certain creditors may file a claim to be paid through the deceased person’s estate.

Seek the Advice of an Attorney

Because various complex situations can arise when someone passes away, seek the advice of an attorney. Not all situations will play out the same way. Also, law differ from state to state. If you have a loved one who passed away and now you are receiving their debt notices, seek the advice of an estate or debt relief attorney.

 

Will My Employer Learn if I Have A Wage Garnishment in Indiana?

After filing Chapter 7, when can I file Chapter 13?

A wage garnishment on your paycheck can come after receiving a judgment during a lawsuit.   This wage garnishment can damage your budget severely.  In Indiana, the creditor will frequently take up to 25% of your gross income.  Will your employer know about the wage assignment?  On some level, it is very likely that your employer will learn that you have a wage garnishment.

Wage Garnishment Orders Are Sent to Your Employer

Wage garnishment orders are sent to the payroll department of your employer.  Small employers sometimes manually deduct this amount from your paycheck.  Smaller employers may be required to set this money aside and manually send these payments to the court for your creditor.  If your employer does not use a payroll service, then the staff must manually send these payments.

Most employers, however, use a payroll service.  If you work at a larger company, your company will either use a payroll service or operate an internal payroll department.  In such cases, only an initial entering of the wage garnishment information is required.  From that point, the payroll system will automatically deduct the amount and send it to the court.

Your Manager and Fellow Employees May Have No Knowledge of the Wage Garnishment

Because many companies use a payroll service, it is very likely that your fellow employees or manager may never learn about your garnishment.   Although the payroll person or department may have knowledge of the garnishment, this information may not be passed to others within the company.   If you work for a larger employer, it is much less likely that this information will be passed to other employees.

Wage Garnishments Can be Stopped by Bankruptcy

If you have excessive debts, you need to consider filing for bankruptcy.  Bankruptcy has the power to instantly stop wage garnishments.   If you are suffering from a garnishment on your check, consider contacting our office for a free consultation.

Can I file for bankruptcy in Indiana if I recently moved here?

If you have only recently moved to Indiana, you can still file bankruptcy within the state of Indiana. You do not generally need to go back to your old state to file.  This can be very convenient and cut down of traveling costs.

Indiana Bankruptcy Filing:  You Must Wait 91 Days (The Greater Part of 180 Days)

The bankruptcy code officially states that bankruptcy filers that want to file in their new state must wait “the greater part of 180 days.”  Therefore, in most situations, you must live within your new state for 91 days to file there.  If you have lived in Indiana more than 91 days, you will be able to file in Indiana for bankruptcy.  This can be much more convenient than traveling back to your old state.  It may save you the cost of an airline ticket if your state is too far away to drive.

Indiana Bankruptcy Filing: The Bankruptcy Court Understands You Need a Jurisdiction Where You Can File

The bankruptcy court understand that everyone needs a jurisdiction to file bankruptcy. The court desires bankruptcy relief to be readily available for those who need it. Generally, there is not an excessive analysis of the proper jurisdiction in which you must file bankruptcy.  Therefore, generally extensive proof of residency within a state is not required. If you live in multiple states, generally it is best to pick the state in which you spend the most time throughout the year.  

Indiana Bankruptcy Filing:  Your Bankruptcy Exemptions Do Not Change as Quickly

If you move to a new state, you may be able to file there quickly. However, your bankruptcy exemptions  will usually not change for two years.  The bankruptcy court will allow you to file in the new state in only 91 days.  The court does not, however, allow “exemption shopping” where people move to a new state just to avail themselves of more liberal bankruptcy exemptions to protect their property.  In Indiana just like all other states, you must wait two years before you can avail yourself of the new state’s exemptions. 

Will My Home Be Searched When Filing Bankruptcy?

Many people fear that a bankruptcy trustee will search their house or apartment during bankruptcy.  Many believe that a cataloging of property or an auction takes place during every bankruptcy case.  In reality, these things virtually never happen in bankruptcy.  In Indiana, no search or other intrusion into your household is likely to happen during bankruptcy.   This article explains why such personal intrusions are uncommon and unnecessary in most bankruptcy cases.

The Petition Already Lists All Property

Your petition for bankruptcy already lists all of your property and financial information.  When you file for bankruptcy, you sign under penalty of perjury that all the information is correct.  In addition, certain verifying documents are required to be presented to the bankruptcy court and trustee.   The trustee can review these documents and do their own due diligence searches if they desire.  With all this information at hand, it is rare that the trustee will need to do any personal examination of your property.

Indiana Bankruptcy Exemptions Protect Most People’s Property

In Indiana, the bankruptcy exemptions protect the vast majority of bankruptcy filer’s property in entirety.  Using these exemptions, you were allowed to keep over $10,000 of personal property per filer.  You are also allowed to keep almost $20,000 in residential real estate per filer.   This protects the vast majority of property held on most cases. It also makes excessive searches of property completely unnecessary.

The Trustee Will Not Do Anything That Does Not Benefit the Creditors

Excessive searches or research almost never proves to produce any more funds for creditors in bankruptcy.  Therefore, the  trustee will not waste their resources on such unnecessary matters.  In addition, the bankruptcy system is designed to be efficient and effective. Such searches or intrusions would be over burdensome and undesirable within the bankruptcy system.  Although the trustee has wide latitude in researching and cataloging assets, such actions are only necessary and a very limited amount of high asset Bankruptcy cases.

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